China Flow Lens - Monthly: Supportive liquidity conditions continued in May, though rising pressure ahead

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China Flow Lens - Monthly: Supportive liquidity conditions continued in May, though rising pressure ahead

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China Flow Lens - Monthly

Supportive liquidity conditions continued

in May, though rising pressure ahead

Equity Strategy

Launching the monthly product China Flow Lens 12 June 2026

We are launching a new product to track fund flows, positioning, and capital supply– Equity Strategy

demand indicators in China’s equity market. The report aims to provide a structured China

framework to assess evolving liquidity conditions and their trading implications.

Patrick Pan, CFA >>

A better capital supply/demand mix for A-shares ResearchMerrill LynchAnalyst(Hong Kong)

Overall, liquidity conditions continue to favor A-shares over Hong Kong equities. While +852 3508 4601

domestic liquidity remains strong and the restock of “national team” capital provides patrick.pan2@bofa.com

downside support for A-shares, Hong Kong faces near-term headwinds from slowing WinnieResearchWuAnalyst>>

southbound inflows, tighter cross-border capital rules, and an upcoming wave of lock-up Merrill Lynch (Hong Kong)

expirations. As such, despite faster style and sector rotations since May, we expect A- +852winnie.wu@bofa.com3508 3058

shares to remain relatively better supported than H-shares in the coming months. Gina Wu >>

Liquidity support in the near term, rising pressures ahead StrategistMerrill Lynch (Hong Kong)

Capital flows to foreign-domiciled China equity funds tracked by EPFR accelerated in +852 3508 8008 gina.wu@bofa.com

May, in line with narrowing UW in China among active EM funds in Apr. At the same

time, China’s domestic ETFs – often used by the “national team” for market support –

continued to see heavy redemptions over the past month. However, with ETF outflows Glossary